NHS TRAFFORD CLINICAL COMMISSIONING GROUP GOVERNING BODY 28 th October 2014

Transcription

1 Agenda Item No. 8 Part 1 X Part 2 NHS TRAFFORD CLINICAL COMMISSIONING GROUP GOVERNING BODY 28 th October 2014 Title of Report Purpose of the Report Detailed Financial Policies and Financial Scheme of Delegation and Reservation To present the Governing Body with the Detailed Financial Policies and Financial Scheme of Delegation and Reservation for approval. Actions Requested Decision Discussion Information Strategic Objectives Supported by the Report Recommendations 1. Consistently achieving local and national quality standards. 2. Delivering an increasing proportion of services from primary care and community services from primary care and community services in an integrated way. 3. Reduce the gap in health outcomes between the most and least deprived communities in Trafford. 4. To be a financial sustainable economy. The Governing Body are asked to approve the Detailed Financial Policies and Financial Scheme of Delegation and Reservation. Discussion history prior to the Governing Body Financial Implications Risk Implications Equality Impact Assessment Communications Issues Public Engagement The Financial Scheme of Delegation and Reservation have been presented at the Audit Committee for discussion and recommended for approval by the Clinical Commissioning & Finance Committee. As documented on the Detailed Financial Policies and Financial Scheme of Delegation and Reservation Insufficient governance and control arrangements around CCG financial expenditure N/a N/a Local citizens have not been required to be involved in

2 Trafford Clinical Commissioning Group Agenda Item No. 8 Summary Prepared by Responsible Director discussions around this paper. Mike Taylor, Head of Governance, Planning and Risk Joe McGuigan, Chief Finance Officer Page 2

3 Trafford Clinical Commissioning Group Agenda Item No. 8 DETAILED FINANCIAL POLICIES AND FINANCIAL SCHEME OF DELEGATION & RESERVATION 1.0 INTRODUCTION 1.1 In line with good governance principles the CCG is required to have detailed financial policies, which further support the Prime Financial Policies as part of the CCG s Constitution. 1.2 The Financial Scheme of Delegation and Reservation puts in place a formal process for further robust expenditure control for delegated governance forums and key officers of the CCG. 1.3 Both the Detailed Financial Policies and Financial Scheme of Delegation and Reservation will work together to ensure that further robust and enabling governance processes control expenditure in the CCG. 2.0 BACKGROUND 2.1 In line with the CCG s Scheme of Reservation and Delegation the CCG is required to produce Detailed Financial Policies that underpin the Prime Financial Policies as part of the overall regulation and control environment. 2.2 The Financial Scheme of Delegation and Reservation is drafted in support of delivery of the Detailed Financial Policies operational expenditure. 2.3 The NHS Constitution s seven principles that guide the NHS in its operations, have the following which forms the context of the Detailed Financial Policies and Financial Scheme of Delegation and Reservation: The NHS is committed to providing best value for taxpayers money and the most cost-effective, fair and sustainable use of finite resources - public funds for healthcare will be devoted solely to the benefit of the people that the NHS serves. 2.4 Approval of these documents is reserved to the Governing Body, which will have effect as if incorporated into the Group s constitution. 3.0 DETAILED FINANCIAL POLICIES 3.1 The Detailed Financial Policies provide the financial responsibilities and policies adopted by the CCG. They are designed to ensure the CCG s financial transactions are carried out in accordance with the law and Government policy in order to achieve probity, accuracy, economy, efficiency and effectiveness. 3.2 These Detailed Financial Policies identify the financial responsibilities which apply to everyone working for the CCG. Page 3

4 Trafford Clinical Commissioning Group Agenda Item No If the policies are not complied with in full, details of the non-compliance and any justification for non-compliance and the circumstances around the noncompliance shall be reported to the next formal meeting of the Governing Body for referring action or ratification. 3.4 The Detailed Financial Policies are provided in appendix FINANCIAL SCHEME OF RESERVATION AND DELEGATION 4.1 The scheme of delegation covers all obligations to commit the CCG to expenditure, including the raising of purchase orders, approving invoices and the signing of contracts. 4.2 The following governance forums and key officers are included for expenditure authorisation: Governing Body Clinical Commissioning & Finance Committee Accountable Officer Chief Operating Officer Chief Finance Officer Specific Budget Holders 4.3 The Detailed Financial Policies are provided in appendix SUMMARY 5.1 The Governing Body are presented with the Detailed Financial Policies and Financial Scheme of Delegation and Reservation for approval as part of maintaining robust financial expenditure in line with good governance principles. 5.2 Upon approval, the Detailed Financial Policies and Financial Scheme of Delegation and Reservation shall have effect as if incorporated into the Group s constitution. 6.0 RECOMMENDATIONS 6.1 The Governing Body are asked to approve the Detailed Financial Policies and Financial Scheme of Delegation and Reservation. Page 4

5 Appendix 1 Detailed Financial Policies April 2014 Document Control

6 POLICY DOCUMENT VERSION CONTROL CERTIFICATE TITLE SUPERSEDES ORIGINATOR EXECUTIVE APPROVAL CIRCULATION Title: NHS Trafford CCG Detailed Financial Policies Version: 1.0 Supersedes: Previous Trafford PCT and GM Cluster Standing Financial Instructions Description of Amendments: Full review and development of Detailed Financial Policies Originator/Author: Joe Mcguigan Designation: Chief Finance Officer Lead Director: As above Ratified by: CCG Governing Body Date Ratified: HISTORY ADVISE ON SUB COMMITTEES/GROUPS: Management Team Audit Committee Governing Body Approved by: Date Approved: Issue Date: Circulated by: Chief Finance Officer Issued To: (as per Circulation List) Review Date: March 2016 REVIEW Responsibility of: Chief Finance Officer Record of Amendment and Approval NO SECTION DATE 1 Guy Fitzpatrick 18 March 14 2 Malcolm Semp 19 March 14 3 Joe McGuigan 2 April 14 4 First review by Management Team 15 April 14 5 Approval by Management Team 23 May 14 6 Audit Committee 3 June 14 7 Governing Body 28 Oct 14

7 NHS TRAFFORD CCG Detailed Financial Policies (DFPs) CONTENTS 1. INTRODUCTION 1.1 General 2. AUDIT 2.1 Audit Committee 2.2 Chief Finance Officer 2.3 Role of Internal Audit 2.4 External Audit 2.5 Fraud and Corruption 3. BUSINESS PLANNING, BUDGETS, BUDGETARY CONTROL AND MONITORING 3.1 Preparation and Approval of Operational Plans and Budgets 3.2 Budgetary Control and Reporting 3.3 Monitoring Returns 4. BANK AND GOVERNMENT BANKING SERVICE (GBS) ACCOUNTS 4.1 General 4.2 Bank and GBS Accounts 4.3 Banking Procedures 4.4 Tendering and Review 5. INCOME, FEES AND CHARGES AND SECURITY OF CASH, CHEQUES AND OTHER NEGOTIABLE INSTRUMENTS 5.1 Income Systems 5.2 Fees and Charges 5.3 Debt Recovery 5.4 Security of Cash, Cheques and Other Negotiable Instruments 6. TENDERING AND CONTRACTING PROCEDURE 6.1 Duty to comply with Detailed Financial Policies 6.2 EU Directives Governing Public Procurement 6.3 Reverse eauctions 6.4 Department of Health, NHS England and Monitor Guidance 6.5 Compliance 6.6 Exemptions/Exclusions 6.7 Pre Contract Requirements and Assessment of Risk 6.8 Setting up Approved Lists 6.9 Competition Requirements for Contracts Below 50, Competition Requirements for Contracts Above 50, Exceptions and Instances Where Formal Tendering is Not Required 6.12 Building and Engineering Construction Works 6.13 Aggregation of Contracts 6.14 Tendering and Procurement 6.15 Invitation to Tender or to be Included on an Approved List 6.16 Receipt and Safe Custody of Tenders, Quotations and Expressions of Interest 6.17 Opening Expressions of Interest to Tenders and Register of Expressions of Interest or Tenders 6.18 Admissibility 6.19 Late Tenders of Expressions of Interest 6.20 Evaluation of Tenders, Quotations and Expressions of Interest 6.21 Acceptance of Tender or Quotation 6.22 Post Tender Negotiations 6.23 Tender reports to the Governing Body 6.24 Collaborative Procurement 6.25 Contract Documentation 6.26 Compliance Requirements For All Contracts 6.27 Extending Existing Contracts 6.28 Personnel and Agency or Temporary Staff Contracts 6.29 Healthcare Services Agreements (see overlap with DFP No. 7) 6.30 Disposals (See overlap with DFP No. 13)

8 6.31 In-house Services 6.32 Applicability of Tendering and Contracting DFPs to Funds Held in Trust 7. NHS CONTRACTS FOR PROVISION OF SERVICES (see overlap with DFP No 6.29) 7.1 Contracts for Healthcare Services 7.2 Involving Partners and Jointly Managing Risk 7.3 Reports to the Governing Body on Healthcare Contracts 8. AGREEMENTS FOR THE PROVISION OF CONTINUING HEALTHCARE (CHC) SERVICES 8.1 Agreements 8.2 Reports to the Governing Body on Continuing Healthcare Agreements 9. TERMS OF SERVICE, ALLOWANCES AND PAYMENT OF MEMBERS OF THE GOVERNING BODY AND EMPLOYEES 9.1 Remuneration and Terms of service 9.2 Funded Establishment 9.3 Staff Appointments 9.4 Processing Payroll 9.5 Contracts of Employment 10. NON-PAY EXPENDITURE 10.1 Delegation of Authority 10.2 Choice Requisitioning, Ordering, Receipt and Payment for Goods and Services 10.3 Joint Finance Arrangements with Local Authorities and Voluntary Bodies 11. FIXED ASSET REGISTERS AND SECURITY OF ASSETS 11.1 Asset Registers 11.2 Security of Assets 12. STORES AND RECEIPT OF GOODS 13. DISPOSALS AND CONDEMNATIONS, LOSSES AND SPECIAL PAYMENT 13.1 Disposals and Condemnations 13.2 Losses and Special Payments 14 INFORMATION TECHNOLOGY 14.1 Responsibilities and Duties of the Chief Finance Officer 14.2 Responsibilities and Duties of Other Officers in Relation to Computer Systems and of a General Application 14.3 Contracts for Computer Services with Other Health Bodies and Outside Agencies 14.4 Requirements for Computer Services which have an Impact on Corporate Financial Systems 15. ACCEPTANCE OF GIFTS BY STAFF AND LINK TO STANDARDS OF BUSINESS CONDUCT 16. RETENTION OF RECORDS 17. RISK MANAGEMENT AND INSURANCE 17.1 Programme of Risk Management 17.2 Insurance: Risk Pooling Schemes Administered by the NHSLA 17.3 Insurance Arrangements with Commercial Insurers 17.4 Arrangements to be Followed by the Governing Body in Agreeing Insurance Cover 18. FUNDS HELD ON TRUST 18.1 General 18.2 Existing Charitable Funds 18.3 New Charitable Funds 18.4 Sources of New Funds 18.5 Investment Management 18.6 Expenditure From Charitable Funds 18.7 Banking Services 18.8 Asset Management 18.9 Reporting Accounting and Audit Taxation and Excise Duty

9 DETAILED FINANCIAL POLICIES INTRODUCTION 1.1 General These Detailed Financial Policies (DFPs) detail the financial responsibilities and policies adopted by NHS Trafford CCG ( CCG). They are designed to ensure the CCG s financial transactions are carried out in accordance with the law and Government policy in order to achieve probity, accuracy, economy, efficiency and effectiveness. They should be used in conjunction with the CCG Constitution which incorporates the Prime Financial Policies and the Financial Scheme of Reservation and Delegation These Detailed Financial Policies identify the financial responsibilities which apply to everyone working for the CCG and its constituent organisations, including Trading Units and any other organisation or third party authorised under a Service Level Agreement to undertake financial responsibilities on behalf of the CCG Should any difficulties arise regarding the interpretation or application of any of the Detailed Financial Policies, then the advice of the Chief Finance Officer must be sought before acting. The user of these Detailed Financial Policies should also be familiar with and comply with the provisions of the CCG's Standing Orders and Prime Financial Policies which can be found within the CCG s Constitution Failure to comply with these Detailed Financial Policies and Standing Orders will be regarded as a serious matter that could result in disciplinary action Overriding Detailed Financial Policies 2. AUDIT If, for any reason, these Detailed Financial Policies are not complied with in full, details of the non-compliance and any justification for non-compliance and the circumstances around the non-compliance shall be reported to the next formal meeting of the Governing Body for referring action or ratification. All members of the CCG have a duty to disclose any non-compliance with these Detailed Financial Policies to the Chief Finance Officer as soon as possible. 2.1 Audit Committee The Governing Body is required to establish an Audit Committee, with clearly defined terms of reference. The Audit Committee will provide an independent and objective view of internal control by: (a) overseeing Internal and External Audit services; (b) reviewing financial and information systems and monitoring the integrity of the financial statements and reviewing significant financial reporting judgements; (c) review the establishment and maintenance of an effective process and infrastructure to deliver integrated governance, including risk management and internal control across the whole of the organisation s activities (both clinical and non-clinical) that supports the achievement of the organisation s objectives; (d) monitoring compliance with Standing Orders and Detailed Financial Policies; (e) reviewing schedules of losses and compensations and making recommendations to the Governing Body; (f) Reviewing the arrangements in place to support the Assurance Framework process prepared on behalf of the Governing Body and advising the Governing Body accordingly Where the Audit Committee considers there is evidence of ultra vires transactions, evidence of improper acts, or if there are other important matters that the Committee wish to raise, the Chair of the Audit Committee should raise the matter at a full meeting

10 of the Governing Body. Exceptionally, the matter may need to be referred to the Department of Health, such matters will be referred to the Chief Finance Officer in the first instance It is the responsibility of the Chief Finance Officer to ensure an adequate internal audit service is provided and the Audit Committee shall be involved in the selection process when/if an internal audit service provider is to be changed and approve the change. 2.2 Chief Finance Officer The Chief Finance Officer is responsible for: (a) ensuring there are arrangements to review, evaluate and report on the effectiveness of internal financial control, including the establishment of an effective internal audit function; (b) ensuring that the internal audit is adequate and meets the NHS mandatory audit standards; (c) deciding at what stage to involve the police in cases of misappropriation and other irregularities not involving fraud or corruption; (d) ensuring that an annual internal audit report is prepared for the consideration of the Audit Committee. The report must cover: (i) a clear opinion on the effectiveness of internal control in accordance with current controls assurance guidance issued by the Department of Health including for example compliance with control criteria and standards, (ii) major internal financial control weaknesses discovered, (iii) progress on the implementation of internal audit recommendations, (iv) progress against plan over the previous year, (v) strategic audit plan covering the coming three years, (vi) a detailed plan for the coming year The Chief Finance Officer or designated auditors are entitled without necessarily giving prior notice to require and receive: (a) access to all records, documents and correspondence relating to any financial or other relevant transactions, including documents of a confidential nature; (b) access at all reasonable times to any land, premises or members of the Governing Body or employee of the CCG ; (c) the production of any cash, stores or other property of the CCG under the control of a member of the Governing Body or an employee; and (d) explanations concerning any matter under investigation. 2.3 Role of Internal Audit Internal Audit will review, appraise and report upon: (a) the extent of compliance with, and the financial effect of, relevant established policies, plans and procedures; (b) the adequacy and application of financial and other related management controls; (c) the suitability of financial and other related management data; (d) the extent to which each CCG s assets and interests are accounted for and safeguarded from loss of any kind, arising from: (i) fraud and other offences, (ii) waste, extravagance, inefficient administration, (iii) poor value for money or other causes Whenever a matter arises which involves, or is thought to involve, irregularities concerning cash, stores, or other property or any suspected irregularity in the exercise of

11 any function of a pecuniary nature, the Chief Finance Officer must be notified immediately The Head of Internal Audit, or other such officer appointed under a Service Level Agreement, will normally attend Audit Committee meetings and has a right of access to all Audit Committee members, the Chair and Accountable Officer of the CCG The Head of Internal Audit, or other such officer appointed under a Service Level Agreement, shall be accountable to the Chief Finance Officer. The reporting system for internal audit shall be agreed between the Chief Finance Officer, the Audit Committee and the Head of Internal Audit. The agreement shall be in writing and shall comply with the guidance on reporting contained in the NHS Internal Audit Manual. The reporting system shall be reviewed at least every three years. 2.4 External Audit The External Auditor is appointed by the Audit Commission and costs charged to the CCG. The Audit Committee must ensure a cost-efficient service. If there are any problems relating to the service provided by the External Auditor, then this should be raised with the External Auditor and referred on to the Audit Commission if the issue cannot be resolved. 2.5 Fraud and Corruption In line with their responsibilities, the Governing Body s Audit Committee shall monitor and ensure compliance with the Secretary of State s Directions on fraud and corruption The CCG shall nominate a suitable person to carry out the duties of the Local Counter Fraud Specialist as specified by the Department of Health Fraud and Corruption Manual and guidance The Local Counter Fraud Specialist shall report to the CCG s Chief Finance Officer and shall work with staff in the NHS Protect Management Services and in accordance with the Department of Health Fraud and Corruption Manual The Local Counter Fraud Specialist will provide an annual written report, on counter fraud work within the CCG and report on issues in year and progress against the plan to the Audit Committee. 3. BUSINESS PLANNING, BUDGETS, BUDGETARY CONTROL AND MONITORING 3.1 Preparation and Approval of Operational Plans and Budgets The Accountable Officer will compile and submit to the Governing Body an Operational Plan, which takes into account financial targets and forecast limits of available resources. The annual business plan will contain: (a) a statement of the significant assumptions on which the plan is based; (b) details of major changes in workload, delivery of services or resources required to achieve the plan Prior to the start of the financial year the Chief Finance Officer will, on behalf of the Accountable Officer, prepare and submit budgets for approval by the Governing Body. Such budgets will: (a) be in accordance with the aims and objectives set out in the Operational Plan and Strategic Plans; (b) accord with workload and manpower plans; (c) be produced following discussion with appropriate budget holders; (d) be prepared within the limits of available funds; and (e) identify potential risks.

12 3.1.3 The Chief Finance Officer shall monitor financial performance against budget and business plan, periodically review them, and report to the Governing Body All budget holders must provide information as required by the Chief Finance Officer to enable budgets to be compiled The Chief Finance Officer has a responsibility to ensure that adequate training is delivered on an on-going basis to budget holders to help them manage successfully. 3.2 Budgetary Control and Reporting The Chief Finance Officer will devise and maintain systems of budgetary control. These may include: (a) monthly financial reports to the Governing Body in a form approved by the Governing Body containing: (i) income and expenditure to date showing trends and forecast year-end position; (ii) movements in working capital, where relevant; (iii) movements in cash and capital, where relevant (iv) capital project spend and projected outturn against plan, where relevant; (v) explanations of any material variances from plan; (vi) details of any corrective action where necessary and the Accountable Officer's and/or Chief Finance Officer's view of whether such actions are sufficient to correct the situation; (b) the issue of timely, accurate and comprehensible advice and financial reports, as required, to each budget holder, covering the areas for which they are responsible; (c) investigation and reporting of variance from financial, workload and manpower budgets; (d) monitoring of management action to correct variances; and (e) arrangements for the authorisation of budget transfers Each Budget Holder is responsible for ensuring that: (a) any likely material overspending or reduction of income which cannot be met by virement is not incurred without the prior consent of the Governing Body; and (b) the amount provided in the approved budget is not used in whole or in part for any purpose other than that specifically authorised subject to the rules of virement No permanent employees should be appointed without the approval of the Accountable Officer other than those provided for within the available resources and staffing establishment as approved by the Governing Body Wherever possible, non-recurring budgets should not be used to finance recurring expenditure without the authority in writing of the Accountable Officer or Chief Financial Officer The Accountable Officer is responsible for identifying and implementing CRES schemes in accordance with the requirements of the annual planning process. 3.3 Monitoring Returns The Accountable Officer (for non-financial monitoring returns) and Chief Financial Officer ( for financial monitoring returns) are responsible for ensuring information relating to the CCG activities is provided to NHS England as requested. 4 BANK AND GOVERNMENT BANKING SERVICE (GBS) ACCOUNTS 4.1 General The Chief Finance Officer is responsible for managing the CCG s banking arrangements and for advising the CCG on the provision of banking services and operation of accounts.

13 This advice will take into account guidance and directions issued from time to time by the Department of Health Banking processes undertaken by NHS Shared Business Services (SBS) will be operated under the SBS Director of Finance approved instructions as set out in the Service Level Agreement. 4.2 Bank and GBS Accounts The Chief Finance Officer is responsible for: (a) bank accounts and GBS accounts; (b) establishing separate bank accounts for the CCG s non-exchequer funds; (c) ensuring payments made from bank or GBS accounts do not exceed the amount credited to the account except where arrangements have been made; and (d) reporting to the Governing Body all arrangements made with the CCG s bankers for accounts to be overdrawn Where such processes a) to d) are undertaken by a third party these will be specified in the Service Level Agreement. In particular the Chief Finance Officer will approve the detailed bank mandate process with the above organisations who will ensure an adequate panel of approved signatories to authorise transactions on behalf of the CCG. These will be approved as per above. 4.3 Banking Procedures The Chief Finance Officer will prepare detailed instructions on the operation of bank and GBS accounts which must include: (a) the conditions under which each bank and GBS account is to be operated; (b) those authorised to sign cheques or other orders drawn on the CCG s accounts; (c) no cheque signatory shall sign cheques or other orders where s/he is the named payee The Chief Finance Officer must advise the CCG s bankers in writing of the conditions under which each account will be operated The detailed instructions in will also be specified, where applicable, to the Chief Finance Officer of the organisations operating the CCG s banking procedures The Chief Finance Officer must advise the SBS in writing of the conditions under which accounts will be operated; the limits to be applied to any overdraft and the limitation on single signatory payments and any changes that may be required by financial regulations of the Health Service, or by resolution of the Governing Body as may be necessary from time to time. In addition, the Chief Finance Officer shall advise the bankers in writing, of the officer(s) authorised to release money from, and draw cheques on, each bank account of the CCG and shall notify promptly the cancellation of any such authorisation Where an agreement is entered into with the SBS or other body for payment to be made on behalf of the CCG from bank accounts maintained in the name of the body, or by Electronic funds Transfer (BACS), the Chief Finance Officer shall ensure that satisfactory security regulations of the SBS or other body relating to bank accounts exist and are observed. This will be specified in a Service Level Agreement with the appropriate body. 4.4 Tendering and Review The Chief Finance Officer will review the banking arrangements of the CCG at regular intervals to ensure they reflect best practice and represent best value for money by periodically seeking competitive tenders for the CCG s banking business.

14 4.4.2 Competitive tenders should be sought at least every five years. The results of the tendering exercise should be reported to the Governing Body. This review is not necessary for GBS accounts. 5. INCOME, FEES AND CHARGES AND SECURITY OF CASH, CHEQUES AND OTHER NEGOTIABLE INSTRUMENTS 5.1 Income Systems The Chief Finance Officer is responsible for ensuring a process is in place for designing, maintaining and ensuring compliance with systems for the proper recording, invoicing, collection and coding of all monies due The Chief Finance Officer is also responsible for ensuring a process is in place for the prompt banking of all monies received directly by the CCG The arrangements for income matters dealt with by third parties will be incorporated in the Service Level Agreement. 5.2 Fees and Charges The CCG shall follow the Department of Health's advice in the "Costing Manual in setting prices for NHS service agreements The Chief Finance Officer is responsible for approving and regularly reviewing the level of all fees and charges other than those determined by NHS England or by Statute. Independent professional advice on matters of valuation shall be taken as necessary. The Chief Finance Officer shall notify the approved price list/fees to all third parties for suitable periodic checks against the actual amounts collected or being billed. This will be specified in the Service Level Agreement All employees must inform the Chief Finance Officer promptly of money due arising from transactions which they initiate/deal with, including all contracts, leases, tenancy agreements, private patient undertakings and other transactions. In each case a sales order must be raised Any income generated from the activities of staff working in their employment hours, and/or utilising any of the CCG s facilities shall be declared as Exchequer Income and dealt with in line with the CCG s official income systems and controls and any other relevant aspects of an employee s terms and condition of employment All income generation activities shall be approved, before they are undertaken, by the appropriate budget holder/manager, and comprehensive and detailed records retained for audit. Such approval shall generally only be granted where the scheme generates a minimum of break even after taking account of all overheads and after further approval of prices by the Chief Finance Officer paragraph above. 5.3 Debt Recovery The Chief Finance Officer is responsible for the appropriate recovery action on all outstanding debts and where undertaken by a third party, specify the appropriate recovery action in the Service Level Agreement Income not received should be dealt with in accordance with losses procedures Systems and processes should reduce any risk of overpayments and enable any overpayment to be detected and recovery initiated. 5.4 Security of Cash, Cheques and other Negotiable Instruments The Chief Finance Officer is responsible for:

15 (a) approving the form of all receipt books, agreement forms, or other means of officially acknowledging or recording monies received or receivable, where money is received directly by the CCG; (b) ordering and securely controlling any such stationery; (c) the provision of adequate facilities and systems for employees whose duties include collecting and holding cash, including the provision of safes or lockable cash boxes, the procedures for keys, and for coin operated machines; and (d) prescribing systems and procedures for handling cash and negotiable securities; (e) and ensuring that the detailed requirements are included in the Service Level Agreement on behalf of the CCG Official money shall not be used for the encashment of private cheques or IOUs All cheques, postal orders, cash etc., shall be banked intact. Disbursements shall not be made from cash received, except under arrangements approved by the Chief Finance Officer The holders of safe keys shall not accept unofficial funds for depositing in their safes unless such deposits are in special sealed envelopes or locked containers. It shall be made clear to the depositors that the CCG is not to be held liable for any loss, and written indemnities must be obtained from the organisation or individuals absolving the CCG from responsibility for any loss. 6. TENDERING AND CONTRACTING 6.1 Duty to comply with Detailed Financial Policies The CCG shall ensure that competitive tenders are invited for: the supply of goods, materials and manufactured articles; the tendering of services including all forms of management consultancy services (other than specialised services sought from or provided by the DH or NHS England); the design, construction and maintenance of building and engineering works (including construction and maintenance of grounds and gardens); disposals The purpose of these Detailed Financial Policies is to set out clear rules and procedures for the procurement of goods, leases, services and works for the CCG. Section 6 also makes staff aware of the increasing number of external agencies who hold influence over the rules affecting tendering and contracting All amounts quoted in these Detailed Financial Policies refer to values must include Value Added Tax Authority to sign contracts is held by the Accountable Officer and the Chief Finance Officer. Authority to sign contracts is delegated to Heads of Service for contracts up to 50,000 only. It is important that final contracts are physically signed by the appropriate authority prior to commencement of activity Approval of contracts will take into account the full contract value as measured over the term of the contract, for the avoidance of doubt a five year contract with an annual value of 100,000 will require approval at the 500,000 limit. 6.2 EU Directives Governing Public Procurement Directives by the Council of the European Union promulgated by the Department of Health (DH) describing procedures for awarding all forms of contracts shall have effect as if incorporated in these Standing Orders and Detailed Financial Policies. To ensure compliance refer to

16 6.3 Reverse eauctions Consultation with the Chief Finance Officer or their nominated representative is required before using eauctions. 6.4 Department of Health, NHS England and Monitor Guidance The CCG shall comply as far as is practicable with the latest requirements of the Department of Health, NHS England and Monitor in respect of capital investment and the procurement and management of management consultants. These can be found in the capital investment manual. 6.5 Compliance All employees (including those in the employ of organisations acting as an agent of the CCG) involved in procurement or making contracts by or on behalf of the CCG shall comply with these Detailed Financial Policies, CCG Procurement Policy and the latest guidance produced by the Department of Health, NHS England and Monitor. These documents incorporate the latest NHS procurement guidance All employees and organisations engaged to act in any capacity to manage or supervise a contract must comply with these Detailed Financial Policies. Officers of the CCG must ensure compliance within their area of responsibility Failure to comply with these Detailed Financial Policies and the related Procurement Procedure s may result in disciplinary action against employees concerned All employees and companies / contractors / suppliers engaged on the CCG s behalf must ensure that any conflicts of interest are declared to the Chief Finance Officer or their nominated representative Current regulations require the advertisement of opportunities in the Official Journal of the European Union (OJEU), if applicable. As the limits and rules change regularly confirmation must be sought from the Contracting departments. Part B services include health and social care services. OJEU advertising is not currently required for Part B services. A notice of contract award in the Official Journal of the European Union (OJEU) is required When EU Directives may be applicable, managers must consult the Chief Finance Officer or their nominated representative to ensure full compliance with EU requirements Where an appropriate standard or code of practice is current at the time of tender, each written contract should require that the goods, services or works will be in accordance with that standard. Any Standard must always be shown as British Standard or equivalent or given the full International Standard Code The procurement of contracts must comply with UK legislation, in particular: Human Rights Act 1998 Data Protection Act 1998 Freedom of Information Act Exemptions and Exclusions Exclusion - Current legislation provides that the rules for public procurement do not apply to the acquisition of land, including existing buildings and other structures, land covered with water, and any estate, interest, easement, servitude or right in or over land. 6.7 Pre Contract Requirements and Assessment of Risk All procurement activity must comply with the CCG s Procurement Policy and Strategy In all cases before commencing any procurement process for goods, services or works with an estimated value in excess of 50,000, the following is required:

17 (a) an authorised business case to justify planned procurement and include: 1. a written procurement plan identifying key risks and the actions required; 2. a written record of the reasons for decisions, updated as appropriate; 3. an appropriate specification which will form the basis for the contract; 4. an estimate of the total cost of the contract (including costs for the full term of the contract, maintenance and continuing costs, and any disposal costs, i.e. aggregated whole life time cost) 5. Signed authorisation in line with the authority limitations (b) consultation with the Chief Finance Officer or their nominated representative on appropriate contract documentation, including terms and conditions; (c) For expenditure on buildings then the Chief Finance Officer needs to be consulted to advise on process. In addition the business case will need to set out the service need, the capital and the revenue costs. (d) a schedule of prioritised and weighted evaluation criteria, including (as appropriate), price, technical merit, quality, sustainability, equality, analysis of cost or any other relevant criteria. The evaluation criteria must not include any non-commercial considerations; (e) unless provided for in paragraph 6.13 (Aggregation of Contracts), confirmation that supplies of a similar nature are being purchased together, and that orders are not split or disaggregated. To do so is a breach of these Detailed Financial Policies, and may be a breach of EU and UK legislation In all cases before commencing any contract for goods, services or works with an estimated value in excess of 50,000, the following is required: (a) evidence that each supplier has the technical capability and capacity to enter into a contract; (b) confirmation from the Chief Finance Officer or his nominated representative that he is satisfied regarding the financial standing of any proposed supplier for any contract exceeding 100,000 or less where the procurement is considered business critical Pre-tender consultation with suppliers must be transparent and not prejudice any potential supplier Technical advice for the preparation of a specification may not be sought from a supplier where it will provide an unfair advantage to any supplier or distort equal and fair competition Where there is a relevant Approved List of Contractors, this must be used as the source of providing the names of contractors from whom quotations and tenders are sought. There must be a consistent selection process in line with EU Directives, Department of Health, NHS England and Monitor guidance and these Detailed Financial Policies. 6.8 Setting up Approved Lists Where the Chief Finance Officer has decided in writing that an approved list of contractors is appropriate for the supply of specific goods and services an approved list may be compiled At least four weeks before the approved list is compiled the approved list must be advertised on Supply2Health (part B Clinical Services only) and by any other appropriate means where it is considered that this would be beneficial, inviting contractors to indicate their interest in inclusion on the list The list must be kept by the Contracting Team, or approved local support function and should: Contain the names of all suppliers who wish to be included and who have been approved by the Chief Finance Officer following an evaluation process.

18 Indicate the level of contract value as recommended by the Chief Finance Officer and the categories of work for which approval is given Any such list may be amended by the addition of further contractors approved by the Chief Finance Officer or by the exclusion of contractors who are not meeting the requirements of the CCG. The Contracting Team will maintain a written record of the reasons for inclusion or exclusion Any such list must be reviewed at regular intervals and at least every four years in accordance with current EU Directives Tendering from Approved Lists Tenders should be sent to a minimum of three suppliers on the approved list, selected by strict rotation. The Chief Finance Officer or their nominated representative shall maintain a written register recording details of all invitations to tender, including reasons for selection and the responses received If a contract falls under the scope of the EU public procurement regime, and existing approved lists cannot be used, and the contract must be advertised under EU regulations. 6.9 Competition Requirements for Contracts below 50, For expenditure up to 5,000, the procurement should be undertaken locally and should follow the normal requisitioning procedures. There is no formal requirement to obtain competitive quotes but requisitioners are expected to adhere to any local/national contracts in place For contracts where the estimated expenditure or income is reasonably expected to be between 5,000 and 50,000 the Officer/Head of Service should select the most efficient method of procurement, which demonstrates value for money, keeping a written record of the reason and action taken. As a minimum written quotations should be sought from at least three providers/suppliers Procurement should be carried out in accordance with these Detailed Financial Policies, CCG Procurement Policy and Strategy and Department of Health, NHS England and Monitor Guidance Competition Requirements for Contracts above 50, For supplies and services contracts with an estimated whole life costs between 50,000 and 111,000 (i.e. the OJEU limit as at 1 ST January 2014) some form of competitive process must take place. Mini competition must take place to select a provider from an approved list or framework agreement For expenditure above 111,000 for supplies contracts, a full competitive tender process must take place. For expenditure above 111,000 for Part A service contracts (i.e. Non healthcare expenditure) and expenditure above 172,000 for Part B service contracts (i.e. Healthcare expenditure), a full competitive tender process must take place When assessing the potential value of a contract the aggregate whole life costs of the contract should be considered. The cumulative costs of a service with contractors must also be taken into account when assessing what competition requirements are needed For contracts valued above 5,000 up to 50,000, the Accountable Officer may give permission for procurement to take place without a competitive quotation being sought in exceptional circumstances for the reasons provided in 6.11 below For contracts valued over 50,000, and up to the OJEU limit, the Chair and one other Governing Body member may give permission for procurement to take place without a tender process for the reasons provided in 6.11 below.

19 Where it is decided that competitive quotations are not applicable and should be waived, the fact of the waiver and the reasons should be documented and recorded in an appropriate record by the appropriate Officer. Waivers will be kept by the Contracting Team and reported on a quarterly basis Where it is decided that competitive tendering is not applicable, as detailed above, and should be waived, the fact of the waiver and the reasons should be documented and recorded in an appropriate record by the Chief Finance Officer or his nominated representative. Waivers will be kept by the Contracting Team and reported to the Audit Committee on a quarterly basis Exceptions and Instances Where Formal Quotations or Tendering is Not Required Formal quotations or tendering procedures may be waived in the following circumstances: (a) Paragraph applies, or; (b) where the supply is proposed under special arrangements negotiated by the Department of Health or NHS England in which event the said special arrangements must be complied with; (c) Detailed Financial Policy No. 12 applies; (d) where the requirement is covered by an existing NHS or other contract capable of being accessed by the CCG, and the existing contract terms offers value for money; (e) where Government Procurement Service Agreements are in place and capable of being accessed by the CCG; However it may be required that specific requirements of the agreement be complied with (f) where a consortium or collaborative arrangement is in place and a lead organisation has been appointed to carry out tendering activity on behalf of the consortium or collaborative members; (g) where the timescale genuinely precludes competitive tendering. Failure to plan the work properly would not be regarded as a justification for waiving the requirement to tender; (h) where specialist expertise/service/works/goods are required and these are available from only one source (specialised service); (i) when the task is essential to complete the project, and arises as a consequence of a recently completed assignment and engaging different consultants for the new task would be inappropriate; (j) there is a clear benefit to be gained from maintaining continuity with an earlier project. However, in such cases the benefits of such continuity must outweigh any potential financial advantage to be gained by competitive tendering; (k) for the provision of legal advice and services providing that any legal firm or partnership commissioned by the CCG is regulated by the Law Society for England and Wales for the conduct of their business (or by the Bar Council for England and Wales in relation to the obtaining of Counsel s opinion) and are generally recognised as having sufficient expertise in the area of work for which they are commissioned. The Chief Finance Officer will ensure that any fees paid are reasonable and within commonly accepted rates for the cost of such work. (l) where allowed and provided for in the Capital Investment Manual. (m) where a Prior Information Notice has indicated that the number of suppliers/providers in the market is limited to one provider; in such cases the development of the market must be considered and action taken as appropriate The waiving of competitive quotations or competitive tendering procedures should not be used to avoid competition or for administrative convenience or other than in those

20 circumstances set out in (i) and (j) to award further work to a consultant originally appointed through a competitive procedure The Chief Finance Officer or his nominated representative must be consulted before any decisions are made relating to procurement, including the requirement for competitive quotations or tendering Procurements which subsequently breach thresholds after original approval shall be considered a breach of standing orders and will be reported in line with DFP and depending on the circumstances acted upon in line with DFP If, after a contract has been agreed, the contractor requests a revision and the revision brings the total contract value to less than the original approved and allocated funding then the revision can be considered with the approval of the Chief Officer If after a contract has been agreed the contractor requests a revision which brings the total amount to greater than the original approved and allocated funding then the contract has to be resubmitted for approval depending on the contract value to the original approval authorities Building and Engineering Construction Works Competitive Tendering cannot be waived for building and engineering construction works and maintenance (other than in accordance with Concode) without Department of Health approval Aggregation of Contracts If a number of contracts of a similar nature are to be tendered, and the total cost of the contracts exceeds the tender threshold of 50,000, they must be tendered as one contract. If the total aggregated contract value exceeds the EU Threshold (see paragraph 6.5.5) they must be tendered as one contract under EU Procurement regulations. (Total cost means whole life costs of the contract. Clarification from the Chief Finance Officer should be sought if there is any doubt as to the definition or quantification of the whole life costs been tendered.) Tenders for contracts for services which require a number of providers to be working in the market place in order to introduce flexibility and competition can be tendered as one, however, separate contracts can be awarded to more than one provider For the avoidance of doubt, the aggregate value of the contract over the whole contract term represents the total value of the contract Tendering and Procurement Unless the competition requirements have been waived in accordance with DFP 6.11, contractors must be appointed by use of one of the following methods, the CCG s approach to procurement is set out in the CCG Procurement Policy and Strategy: (a) Selective tendering from an Approved List Selective tendering from an Approved List is appropriate when there is a need to tender for a particular type of service on a frequent basis. (b) Contracting with Any Qualified Provider from an Accredited Approved List Contracting with Any Qualified Provider is appropriate when services are required on an ad-hoc basis or to facilitate patient choice. It may be described as an accreditation process underpinned by a framework agreement or call off contract. Use of an Approved List will be required in accordance with Paragraph 6.8 (Setting up Approved Lists). (c) The Open Tendering Procedure Under the Open Tender Procedure all interested candidates who respond to a Supply2Health advertisement and an OJEU advertisement if appropriate (and other

21 adverts placed where it is considered that this would be beneficial) must be invited to tender. The best bid is chosen according to evaluation criteria. Under this procurement route, the advertisement and Service Specification must be very clearly defined so that bidders know exactly what is being procured. There is no scope to negotiate with bidders. (d) The Restricted Tendering Procedure Under the Restricted Tendering Procedure, interested candidates are invited to respond to the OJEU, NHS Supply2Health advertisement or advert placed by any other appropriate means (where it is considered that this would be beneficial) by submitting an expression of interest. Under this procurement route, a shortlist of candidates is then drawn up and invited to tender. There is no scope to negotiate with tenderers following receipt of bids. (e) Competitive Dialogue Tendering The use of the Competitive Dialogue Procedure is applicable only for particularly complex contracts where development of the detailed specification will take place during the tender process. Under this procurement route, shortlisted parties are invited to participate in dialogue which may have several stages. Once the dialogue is concluded, suppliers are invited to submit a final tender. There is one provision for bidders to clarify, specify and fine-tune their final bids before a preferred bidder is chosen. Robust governance is required as there needs to be careful management of bids and avoidance of conflicts of interest to ensure equality of treatment and avoid any unfair advantage between bidders. Use of the Competitive Dialogue Procedure must be approved by the Chief Finance Officer or their nominated representative. The use of this procedure is governed by EC Directive rules Procurement may be undertaken by the CCG s Contracting Team, or on its behalf by designated Third Party agents where appropriate such as Greater Manchester Commissioning Support Unit (GMCSU) or the NHS Shared Business Services Commercial Procurement Services (SBS CPS). Approval by the Chief Finance Officer must be obtained if such an agent is to carry out procurements over and above contractual obligations to the CCG (i.e. CCG bespoke procurements other than collaborative procurements) Invitation to Tender or to be Included on an Approved List All invitations to tender or for expressions of interest in a tender or inclusion on an Approved List must be advertised on Supply2Health, OJEU if applicable, or by any other appropriate means if it is considered that it would be beneficial All requests for expressions of interest or invitations to tender shall state the date and time as being the latest time for receipt The CCG will keep a register of the companies that have expressed an interest and whether or not they have been invited to tender All tenders, other than those being submitted via electronic tendering software, shall be submitted in accordance with the following requirements: Tenders must be submitted in a plain sealed package or envelope addressed to the Accountable Officer bearing a pre-printed label supplied by the CCG and the latest date and time for the receipt of such tender. Tender envelopes shall not bear any names or marks indicating the sender. The use of courier/postal services must not identify the sender on the envelope or on any receipt so required by the deliverer.